ACCA Strategic Professional · Strategic Business Leader · Concepts of strategy
Orlin Tech has strong engineers, a patented process and a respected brand. Managers say these resources are why it outperforms rivals. A consultant argues that the real source of advantage is Orlin's ability to coordinate engineers, suppliers and customers' feedback to keep improving products faster than competitors. Which concept does the consultant's argument most closely reflect?
The consultant is describing core competences. Core competences are the activities and processes by which an organisation deploys its resources, here coordinating engineers, suppliers and customer feedback to improve faster than rivals. This differs from threshold resources, which only allow a firm to compete, and from physical assets.
- AThreshold resources, which are needed just to compete in the market
- BCore competences, being activities and processes that deploy resources to create advantageCorrect
- CTangible resources, being physical assets on the balance sheet
- DEconomies of scale arising from higher output
Explanation
Competences are the activities and processes through which an organisation deploys its resources effectively. The consultant stresses coordination and continual improvement, which is a core competence. Threshold resources only allow participation, and tangible assets are not the focus of the argument.
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